Seasoned analysts and healthcare industry players in the U.S can attest that a deal, whether an acquisition, a merger, a takeover, a buyout, or just some sort of deal, is likely to happen at any time in the healthcare sector.
And true to that, the biotech space saw more than $309 billion in deals in 2021. Moreover, the sector has already seen over $160 billion in deals change hands in 2022 so far—a figure that’s likely to blow up if the potential acquisition of Seagen Inc (NASDAQ: SGEN) by Merck & Co., Inc (NYSE: MRK) goes down.
Merck owns Seagen shares worth about $5 million. Besides, the two med-tech firms recently made plans to work together on various capacities, including rolling out joint experimental treatment exercises with their top-selling cancer remedies and drugs. Further, Merck owns the distribution license to one of Seagen’s drugs outside the U.S.
So, it’s easy to see why almost all Wall Street analysts expect Merck to make a move to acquire Seagen. But Merck could just as likely surprise analysts and take a completely different direction.
Let’s dive into both likely scenarios and make some sense of each.
Scenario 1: Merck purchases Seagen
A Seagen acquisition by Merck would shake up the U.S. healthcare industry, especially the cancer drug and treatment healthcare sub-sector.
Let’s face it, Merck is practically dominating the cancer drug and treatment scene with its acclaimed Keytruda offering that racked in north of $17 billion in revenue in 2021, not to mention that the medical firm has a $200 billion-plus market share.
Seagen is also doing great, having introduced life-changing cancer treatment therapies that work to combat cancer while minimizing side effects efficiently.
We could conclude that Merck’s competitors would feel seismic proportion effects if Merck were to buy at least 51% holding company ownership of Seagen. That’s enough to control strategic decisions.
Scenario 2: Merck doesn’t purchase Seagen
Would these mean that the U.S. cancer drug and treatment remedy market status quo remains as is? Not necessarily.
Merck isn’t the only corporation eyeing Seagen. Typically, healthcare players and counterparts discuss takeovers and acquisition deals and keep talks under wraps until there is at least some initial agreement.
Who’s to say that Seagen executives aren’t talking to a suitable buyer this minute?